EXHIBIT 99.2
SETTLEMENT AGREEMENT DATED AS OF
FEBRUARY 27, 2009 AMONG PRESIDENTIAL REALTY CORPORATION
AND ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ AND OTHER ENTITIES
Settlement Agreement (this "Agreement") dated as of February 27, 2009
among Presidential Realty Corporation ("Presidential"), Presidential IATG, Inc.
("Pres IATG"), and PRC Member LLC ("PRC" and, together with Presidential and
Pres IATG, being sometimes hereinafter collectively referred to as the
"Presidential Parties"), Presidential and Pres IATG each being a Delaware
corporation and PRC being a Delaware limited liability company and each of the
Presidential Parties having its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, an individual
residing at ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇▇"),
and the other parties that have executed a copy of this Settlement Agreement on
the signature pages hereof, each of the other parties having an address at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇▇▇▇ and those other
parties being sometimes hereinafter collectively referred to as the
"▇▇▇▇▇▇▇▇▇▇▇▇ Parties").
W I T N E S S E T H:
FWI
---
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇ is the manager of JJFW, LLC, a New Jersey limited
liability company ("JJFW") and owns 99% of the membership interests therein;
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇'▇ wife, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ("▇. ▇▇▇▇▇▇▇▇▇▇▇▇"),
owns 1% of the membership interests in JJFW;
WHEREAS, on or about October 21, 2003, Presidential made a loan to JJFW
in the principal amount of $4,500,000 (together with interest and any and all
other sums due and owing to Presidential in connection therewith, the "FWI
Loan") in order to provide financing for nine (9) Delaware limited liability
companies listed on Exhibit A attached hereto (the "FWI Fee Owners"),
respectively, in connection with their acquisition of nine (9) different housing
projects located in the State of Virginia and also identified on Exhibit A
attached hereto (the "FWI Properties");
WHEREAS, the FWI Loan is governed by that certain Loan Agreement dated
October 21, 2003 by and between Presidential and JJFW (the "Original FWI Loan
Agreement");
WHEREAS, the current outstanding principal balance of the FWI Loan is
$2,074,994;
WHEREAS, each of the FWI Fee Owners has as its manager, owning a 1%
interest therein, a Delaware limited liability company known as ▇▇▇▇▇▇▇▇▇▇ ▇▇
Manager, LLC ("▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇ is the manager of ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager and owns
99% of the membership interests therein and ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ owns 1% of the
membership interests therein;
WHEREAS, each of the FWI Fee Owners has as its other member, owning a
99% interest therein, a Delaware limited partnership known as ▇▇▇▇▇▇▇▇▇▇ ▇▇
Realty Partners, LP ("▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners");
WHEREAS, the managing general partner of ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners
is FW Realty Advisors, LLC, a Delaware limited liability company ("FW Realty
Advisors");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇ is the manager of FW Realty Advisors and owns 99%
of the membership interests therein and ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ owns 1% of the
membership interests therein;
WHEREAS, the only other partner in ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners is
▇▇▇▇▇▇▇▇▇▇▇▇, owning a 99% limited partnership interest therein;
WHEREAS, the FWI Loan is guaranteed by ▇▇▇▇▇▇▇▇▇▇▇▇ for the benefit of
Presidential pursuant to a Non-Recourse Guaranty dated as of October 24, 2003
(the "FWI Non-Recourse Guaranty") and a Limited Recourse Guaranty dated as of
October 24, 2003 (the "FWI Limited Recourse Guaranty" and, together with the FWI
Non-Recourse Guaranty, the "Original FWI Guaranties");
WHEREAS, in accordance with that certain Loan Modification Agreement
dated July 17, 2006 (the "FWI Loan Modification Agreement"), Presidential and
JJFW modified the terms of the Original FWI Loan Agreement (the Original FWI
Loan Agreement, as modified by the FWI Loan Modification Agreement, being
hereinafter referred to as the "FWI Loan Agreement");
WHEREAS, simultaneous with the execution of the FWI Loan Modification
Agreement, Lightstone Holdings LLC executed and delivered to Presidential that
certain Unconditional Guarantee Agreement dated July 17, 2006, pursuant to which
Lightstone Holdings LLC guaranteed the payment of $1,000,000 of the FWI Loan
(the "FWI Unconditional Guaranty" and, together with the Original FWI
Guaranties, the "FWI Guaranties");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇'▇ obligations under the Original FWI Guaranties
are secured by that certain Security and Pledge Agreement, dated as of October
24, 2003, between ▇▇▇▇▇▇▇▇▇▇▇▇ and Presidential, pursuant to which ▇▇▇▇▇▇▇▇▇▇▇▇
pledged to Presidential his 99% limited partnership interest in ▇▇▇▇▇▇▇▇▇▇ ▇▇
Realty Partners (the "FWI Pledge Agreement;" the FWI Loan Agreement, the FWI
Guaranties, and the FWI Pledge Agreement, together with all other documents,
instruments and agreements which now or hereafter evidence, secure and/or
guaranty the FWI Loan, as the same may be amended, modified, supplemented,
restated, renewed and/or replaced from time to time, are hereinafter
individually referred to as an "FWI Loan Document" and, collectively, as the
"FWI Loan Documents");
FWII
----
WHEREAS, on or about October 28, 2003, the nine Delaware limited
liability companies identified on Exhibit B attached hereto (the "FWII Fee
Owners"), respectively, acquired title to the nine housing projects also
identified on Exhibit B attached hereto (the "FWII Properties"), eight of which
are located in the State of Virginia and one of which is located in the State of
North Carolina (each of the FWI Fee Owners and the FWII Fee Owners being
hereinafter referred to as a "FW Fee Owner" and collectively as the "FW Fee
Owners" and each of the FWI Properties and the FWII Properties being hereinafter
referred to as an "FW Property" and collectively as the "FW Properties");
WHEREAS, the manager of each of the FWII Fee Owners, as well as the
holder of a 1% interest therein, is ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager;
WHEREAS, ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment, LLC, a Delaware limited liability
company ("▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment"), owns a 99% interest in each of the FWII
Fee Owners;
WHEREAS, the members of ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment consist of (i)
▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager, which is the managing member thereof and holds a 1%
interest therein, (ii) ▇▇▇▇▇▇▇▇▇▇▇▇, who owns a 59% interest therein, (iii) the
DWL 2003 Family Trust, which owns a 15% interest therein, and (iv) certain
individuals and entities identified on Exhibit A to the Operating Agreement for
▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment (the "Group A Members"), who collectively own a 25%
interest therein;
WHEREAS, the sole trustee of the DWL 2003 Family Trust is ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, and the sole beneficiaries of the DWL 2003 Family Trust are
▇▇▇▇▇▇▇▇▇▇▇▇'▇ children;
Lightstone I/PRC
WHEREAS, on or about September 27, 2004 Presidential made a loan to
Lightstone Member LLC, a Delaware limited liability company ("Lightstone I"), in
the principal amount of $8,600,000 (together with interest and any and all other
sums due and owing to Presidential in connection therewith, the "Lightstone I
Loan");
WHEREAS, the Lightstone I Loan is governed by that certain Loan
Agreement dated September 27, 2004 by and between Presidential and Lightstone I
(the "Lightstone I Loan Agreement");
WHEREAS, immediately prior to making the Lightstone I Loan,
▇▇▇▇▇▇▇▇▇▇▇▇ was the sole member of Lightstone I;
WHEREAS, simultaneous with Presidential making the Lightstone I Loan to
Lightstone I, Presidential acquired a 29% membership interest in Lightstone I
and ▇▇▇▇▇▇▇▇▇▇▇▇ and Presidential entered into an Amended and Restated Operating
Agreement of Lightstone I (the "Lightstone I Operating Agreement");
WHEREAS, Lightstone I is the owner of 100% of the membership interests
in the Delaware limited liability companies identified on Exhibit C attached
hereto (the "Lightstone I Fee Owners") which own, respectively, the shopping
malls also identified on Exhibit C attached hereto (the Lightstone I
Properties);
WHEREAS, the Lightstone I Loan is secured by (i) a pledge from
Lightstone I to Presidential of its membership interest in the Lightstone I Fee
Owners (the "Lightstone I Pledge"), and (ii) a Guaranty made by ▇▇▇▇▇▇▇▇▇▇▇▇ for
the benefit of Presidential (the "Lightstone I Guaranty;" the Lightstone I Loan
Agreement, the Lightstone I Operating Agreement, the Lightstone I Pledge and the
Lightstone I Guaranty, together with all other documents, instruments and
agreements which now or hereafter evidence, secure and/or guaranty the
Lightstone I Loan, as the same may be amended, modified, supplemented, restated,
renewed and/or replaced from time to time are hereinafter individually referred
to as a "Lightstone I Loan Document" and, collectively, as the "Lightstone I
Loan Documents");
WHEREAS, simultaneous with the making of the Lightstone I Loan,
▇▇▇▇▇▇▇▇▇▇▇▇ made a loan to PRC in the amount of $2,600,000 (the "PRC Loan");
WHEREAS, the PRC Loan is governed by that certain Loan Agreement dated
September 27, 2004 by and between PRC and ▇▇▇▇▇▇▇▇▇▇▇▇ (the "PRC Loan
Agreement");
WHEREAS, immediately prior to making the PRC Loan, Presidential was the
sole member of PRC;
WHEREAS, simultaneous with ▇▇▇▇▇▇▇▇▇▇▇▇ making the PRC Loan,
▇▇▇▇▇▇▇▇▇▇▇▇ acquired a 71% interest in PRC and ▇▇▇▇▇▇▇▇▇▇▇▇ and Presidential
entered into an Amended and Restated Operating Agreement of PRC dated as of
September 27, 2004 (the "PRC Operating Agreement");
WHEREAS, PRC is the owner of 100% of the membership interests in a
Delaware limited liability company listed on Exhibit D attached hereto (the "PRC
Fee Owner"), which owns a shopping mall also identified on Exhibit D attached
hereto (the "PRC Property");
WHEREAS, the PRC Loan is secured by (i) a pledge of PRC's ownership
interest in the PRC Fee Owner (the "PRC Pledge"), and (ii) a Guaranty made by
Presidential for the benefit of ▇▇▇▇▇▇▇▇▇▇▇▇ (the "PRC Guaranty;" the PRC Loan
Agreement, the PRC Operating Agreement, the PRC Pledge and the PRC Guaranty,
together with all other documents, instruments and agreements which now or
hereafter evidence, secure and/or guaranty the PRC Loan, as the same may be
amended, modified, supplemented, restated, renewed and/or replaced from time to
time, are hereinafter individually referred to as a "PRC Loan Document" and,
collectively, as the "PRC Loan Documents");
Lightstone II
-------------
WHEREAS, on or about December 23, 2004 Presidential made a loan to
Lightstone Member II LLC, a Delaware limited liability company ("Lightstone
II"), in the principal amount of $7,500,000 (together with interest and any and
all other sums due and owing to Presidential in connection therewith, the
"Lightstone II Loan");
WHEREAS, the Lightstone II Loan is governed by that certain Loan
Agreement dated December 23, 2004 by and between Presidential and Lightstone II
(the "Lightstone II Loan Agreement");
WHEREAS, simultaneous with Presidential making the Lightstone II Loan
to Lightstone II, Presidential acquired a 29% membership interest in Lightstone
II;
WHEREAS, Presidential and Liberty Gardens Associates, L.L.C., a New
Jersey limited liability company ("Liberty Gardens"), as the owner of a 71%
membership interest in Lightstone II, entered into a Second Amended and Restated
Operating Agreement of Lightstone Member II LLC, dated January 8, 2008 (the
"Lightstone II Operating Agreement");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇ is the manager of Liberty Gardens and holds a
91.55% interest therein and the other members of Liberty Gardens are ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, who holds a 7.04% interest therein, and ▇▇▇▇▇▇ ▇▇▇▇▇, who holds a
1.41% interest therein;
WHEREAS, Lightstone II is the owner of 100% of the membership interests
in the Delaware limited liability companies identified on Exhibit E attached
hereto (the "Lightstone II Fee Owners") which own, respectively, the shopping
malls also identified on Exhibit E attached hereto (the "Lightstone II
Properties");
WHEREAS, the Lightstone II Loan is secured by (i) a pledge from
Lightstone II to Presidential of its membership interest in the Lightstone II
Fee Owners (the "Lightstone II Pledge"), and (ii) a Guaranty made by
▇▇▇▇▇▇▇▇▇▇▇▇ for the benefit of Presidential (the "Lightstone II Guaranty;" the
Lightstone II Loan Agreement, the Lightstone II Operating Agreement, the
Lightstone II Pledge and the Lightstone II Guaranty, together with all other
documents, instruments and agreements which now or hereafter evidence, secure
and/or guaranty the Lightstone II Loan, as the same may be amended, modified,
supplemented, restated, renewed and/or replaced from time to time, are
hereinafter individually referred to as a "Lightstone II Loan Document" and,
collectively, as the "Lightstone II Loan Documents");
WHEREAS, on or about June 23, 2006 Presidential made an additional loan
to Lightstone II in the amount of $335,000 (and all references to the Lightstone
II Loan in this Agreement hereinafter appearing shall mean and apply to the
loans made by Presidential to Lightstone II in the aggregate amount of
$7,835,000);
Lightstone III
--------------
WHEREAS, on or about June 30, 2005 Presidential made a loan to
Lightstone Member III, LLC, a Delaware limited liability company ("Lightstone
III"), in the principal amount of $9,500,000 (together with interest and any and
all other sums due and owing to Presidential in connection therewith, the
"Lightstone III Loan" and, together with the Lightstone I Loan and the
Lightstone II Loan, being sometimes hereinafter collectively referred to as the
"Lightstone Loans," and the FWI Loan and the Lightstone Loans being sometimes
hereinafter collectively referred to as the "Loans");
WHEREAS, the Lightstone III Loan is governed by that certain Loan
Agreement dated June 30, 2005 by and between Presidential and Lightstone III
(the "Lightstone III Loan Agreement");
WHEREAS, Lightstone III is governed by that certain Operating Agreement
of Lightstone III, dated June 30, 2005 (the "Lightstone III Operating
Agreement"), and its members consist of ▇▇▇▇▇▇▇▇▇▇▇▇ who owns a 71% interest and
Presidential which owns a 29% interest;
WHEREAS, Lightstone III is the owner of 100% of the membership
interests in Macon Burlington Owner, LLC ("Macon Burlington"), a Delaware
limited liability company which is the sole owner of the Delaware limited
liability companies identified in Exhibit F attached hereto (the "Lightstone III
Fee Owners") which own, respectively, the shopping malls also identified in
Exhibit F attached hereto (the "Lightstone III Properties" and, together with
the Lightstone I Properties and the Lightstone II Properties, the "Lightstone
Properties");
WHEREAS, the Lightstone III Loan is secured by (i) a pledge from
Lightstone III to Presidential of its membership interest in Macon Burlington
(the "Lightstone III Pledge"), and (ii) a Guaranty made by ▇▇▇▇▇▇▇▇▇▇▇▇ for the
benefit of Presidential (the "Lightstone III Guaranty;" the Lightstone III Loan
Agreement, the Lightstone III Operating Agreement, the Lightstone III Pledge and
the Lightstone III Guaranty, together with all other documents, instruments and
agreements which now or hereafter evidence, secure and/or guaranty the
Lightstone III Loan, as the same may be amended, modified, supplemented,
restated, renewed and/or replaced from time to time, are hereinafter
individually referred to as a "Lightstone III Loan Document" and, collectively,
as the "Lightstone III Loan Documents"; the FWI Loan Documents, the Lightstone I
Loan Documents, the Lightstone II Loan Documents and the Lightstone III Loan
Documents being sometimes hereinafter collectively referred to as the "Loan
Documents");
IATG
----
WHEREAS, IATG Puerto Rico, LLC ("IATG" and, together with the FW Fee
Owners and the Lightstone II Fee Owners, being sometimes hereinafter
collectively referred to as the "Property Owners" and each of the Property
Owners being sometimes hereinafter individually referred to as a "Property
Owner") is a Delaware limited liability company and the owner of certain real
property located in the Commonwealth of Puerto Rico, a United States Territory,
more particularly described in Exhibit G attached hereto (the "IATG Property"
and, together with the FW Properties and the Lightstone II Properties, being
sometimes hereinafter collectively referred to as the "Properties" and each of
the Properties being sometimes hereinafter individually referred to as a
"Property");
WHEREAS, the members of IATG consist of (i) IATG Manager, LLC, a
Delaware limited liability company which is its managing member and owns a 1%
interest therein ("IATG Manager"); (ii) ▇▇▇▇▇▇▇▇▇▇▇▇, who owns a 98% interest
therein; and (iii) ▇▇▇▇▇ ▇▇▇▇▇▇▇, who owns a 1% interest therein ("▇▇▇▇▇▇▇");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇ is the managing member of IATG Manager and the
holder of a 99% interest therein;
WHEREAS, ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ owns a 1% membership interest in IATG Manager;
Asserted Claims
WHEREAS, the parties acknowledge that Lightstone I is in default of its
obligations under the Lightstone I Loan, Lightstone II is in default of its
obligations under the Lightstone II Loan, and Lightstone III is in default of
its obligations under the Lightstone III Loan;
WHEREAS, the parties further acknowledge that the Lightstone I Fee
Owners (other than West Manchester Mall LLC) and the PRC Fee Owner are in
default of their obligations under the first mortgage loan encumbering the
Lightstone I Properties (other than the West Manchester Mall) and the PRC
Property, and the Lightstone III Fee Owners are in default of their obligations
under the first mortgage loan encumbering the Lightstone III Properties;
WHEREAS, the parties further acknowledge that (i) the holder of the
first mortgage encumbering the Lightstone I Properties (other than the West
Manchester Mall) and the PRC Property and the holder of the first mortgage
encumbering the Lightstone III Properties, respectively, have commenced steps to
foreclose their mortgages and/or acquire title to the Lightstone I Properties
(other than the West Manchester Mall) and the PRC Property and the Lightstone
III Properties, respectively, and (ii) the West Manchester Mall does not provide
cash flow sufficient to pay the Lightstone I Loan, and, based thereon, neither
Lightstone I nor Lightstone III has sources of income (nor does either have any
other assets) with which it can pay the Lightstone I Loan and the Lightstone III
Loan, respectively;
WHEREAS, based on the aforesaid defaults with respect to the Lightstone
Loans, Presidential has asserted various claims against ▇▇▇▇▇▇▇▇▇▇▇▇ personally
with respect to the Lightstone I Guaranty, the Lightstone II Guaranty, the
Lightstone III Guaranty and with respect to his obligations under the Lightstone
I Operating Agreement, the Lightstone II Operating Agreement, and the Lightstone
III Operating Agreement (the "Asserted Claims");
WHEREAS, ▇▇▇▇▇▇▇▇▇▇▇▇ has disputed the Asserted Claims; and
WHEREAS, the parties hereto desire to settle the Asserted Claims on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
INCORPORATION/LOAN STATUS
-------------------------
1.01 Incorporation. The recitals to this Agreement are fully
incorporated herein by this reference thereto with the same force and effect as
though restated herein.
1.02 Loan Status. The ▇▇▇▇▇▇▇▇▇▇▇▇ Parties acknowledge and agree that
the Lightstone Loans are all in default and there is now due and owing with
respect to the Loans the following:
(i) FWI Loan - $2,074,994.00 in principal plus interest from
February 1, 2009;
(ii) Lightstone I Loan - $8,600,000.00 in principal plus
interest from October 1, 2008;
(iii) Lightstone II Loan - $7,835,000.00 in principal plus
interest from January 1, 2009; and
(iv) Lightstone III Loan - $9,500,000.00 in principal plus
interest from January 1, 2008;
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
---------------------------------------------
2.01 Representations and Warranties of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties.
----------------------------------------------------------
The ▇▇▇▇▇▇▇▇▇▇▇▇ Parties do hereby represent and warrant to the Presidential
Parties as follows:
(a) Loan Documents. The Loan Documents, as modified by the
Settlement Documents (as hereinafter defined), to which each, respectively, is a
party, are its valid and binding obligations and are enforceable by
Presidential, in accordance with their respective terms; there are no defenses,
offsets or counterclaims against enforcement of said documents; and none of the
▇▇▇▇▇▇▇▇▇▇▇▇ Parties has any claim against Presidential with respect to the Loan
Documents, as modified by the Settlement Documents.
(b) Organization and Authority. Each of the ▇▇▇▇▇▇▇▇▇▇▇▇
Parties which is an entity is duly formed, organized, validly existing and in
good standing under the laws of New Jersey or Delaware, as the case may be. As
of the date of this Agreement and at all times hereafter, the ▇▇▇▇▇▇▇▇▇▇▇▇
Parties have and will continue to have the capacity, right, power and authority
to execute this Agreement and to perform their respective obligations hereunder
and to consummate the transactions described herein or contemplated hereby
including, without limitation, the execution and delivery of all the Settlement
Documents (as hereinafter defined) and the performance of their respective
obligations thereunder. The FWII Fee Owners are each governed in accordance with
a Limited Liability Company Agreement dated July 10, 2003, IATG is governed by a
Limited Liability Company Agreement dated October 3, 2003, IATG Manager, LLC is
governed by an Operating Agreement dated October 3, 2003, The DWL 2003 Family
Trust is governed by a Trust Agreement dated May 5, 2003, and ▇▇▇▇▇▇▇▇▇▇ ▇▇
Investment is governed by an Amended and Restated Operating Agreement dated July
1, 2003, true, correct and complete copies of each of which have been provided
to Presidential and the same have not been modified or amended. The
organizational documents of each of the other ▇▇▇▇▇▇▇▇▇▇▇▇ Parties which is an
entity have not been modified since the closing of the FWI Loan, the Lightstone
I Loan, the Lightstone II Loan, or the Lightstone III Loan, as the case may be,
in which each was involved, except for the Lightstone II Operating Agreement and
except that subsequent to the closing of the FWI Loan, ▇▇▇▇▇▇▇▇▇▇▇▇ assigned to
▇. ▇▇▇▇▇▇▇▇▇▇▇▇ the 1% interest in JJFW which she now owns.
(c) Compliance. The execution, delivery and performance of
this Agreement and the Settlement Documents by each ▇▇▇▇▇▇▇▇▇▇▇▇ Party and the
consummation of the transactions hereby and thereby contemplated will not
conflict with any law, statute or regulation to which each is subject or any
judgment, license, order or permit applicable to each ▇▇▇▇▇▇▇▇▇▇▇▇ Party or the
Properties; no consent, approval, authorization or order of any court,
governmental authority or other person is required in connection with the
execution, delivery or performance by them of this Agreement or the Settlement
Documents.
(d) Bankruptcy. None of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties is the
subject of or a party to any completed or pending bankruptcy, reorganization or
insolvency proceeding pursuant to ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
state or federal law, and has not filed an answer or otherwise admitted in
writing insolvency or inability to pay its or his debts or made an assignment
for the benefit of creditors nor consented to any appointment of a receiver or
trustee of all or a part of its or his property, except that Lightstone I,
Lightstone II and Lightstone III have acknowledged that they are unable to pay
the Lightstone Loans, the Lightstone I Fee Owners (other than West Manchester
Mall LLC) and the Lightstone III Fee Owners have acknowledged that they are
unable to pay the first mortgages encumbering the Lightstone I Properties (other
than the West Manchester Mall) and the Lightstone III Properties, respectively,
and have not contested the appointment of a receiver or trustee of all or a part
of their respective properties (other than the West Manchester Mall), and Macon
Burlington has acknowledged that it is unable to pay a mezzanine loan (the
"Macon Burlington Mezz Loan") made to it by Wachovia Bank, National Association
("Wachovia"). None of them is entering into this Agreement or any of the
Settlement Documents or undertaking any of the arrangements or transactions
contemplated hereby or thereby with actual intent to delay, hinder or defraud
either present or future creditors. ▇▇▇▇▇▇▇▇▇▇▇▇ hereby further represents and
warrants that as of the date hereof, at a fair valuation, the sum of his debts
is not greater than the present fair value of his assets.
(e) Judgments. None of them is the subject of any judgment in
excess of $250,000 which is unsatisfied of record or docketed in any court of
any state of which any of the Properties is located or in any other court
located in the United States or the Commonwealth of Puerto Rico, other than any
judgment which is bonded or covered by insurance.
(f) Title to Property/Encumbrances. Other than tenant leases
made in the ordinary course of business, they are not aware of any unrecorded
mortgages, unrecorded security interests, unrecorded liens, unrecorded
assessments, unrecorded claims or unrecorded encumbrances with respect to the
Properties.
(g) Compliance With Laws; Hazardous Materials. To the best of
their knowledge, they have received no notice that the location, existence and
use of the Properties is not in compliance with all applicable laws, rules,
ordinances and regulations including, without limitation, building, fire,
safety, zoning, health and environmental rules and regulations. To the best of
their knowledge, the Properties comply with all local, state and federal
environmental laws and they are unaware of the existence on, in, about or under
the Properties of Hazardous Material (as hereinafter defined). As used in this
Agreement, "Hazardous Material" means any hazardous or toxic material, substance
or waste which is defined by those or similar terms or is regulated as such
under any statute, law, ordinance, rule or regulation of any local, state or
federal authority having jurisdiction over the Properties or its use including,
but not limited to, any material, substance or waste which is: (a) defined as a
hazardous substance under Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. ss.1317), as amended; (b) defined as a hazardous waste under Section
1004 of the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 et. seq.),
as amended; or (c) defined as a hazardous waste substance under Section 101 of
the Comprehensive Environmental Response Compensation and Liability Act (42
U.S.C. ss.9601 et. seq.), as amended. They have no knowledge of any release or
threatened release of any Hazardous Material, pollutant or contaminant on the
Properties; other than the existence of asbestos at the FW Properties, they have
no knowledge of the existence of any Hazardous Material located on the
Properties; they have not generated, stored, handled, used or disposed of any
Hazardous Material on the Properties; they have not received any oral or written
notice of any environmental, nuisance or injury claims against them from any
governmental or private entity relating in any way to the use of the Properties;
and to the best of their knowledge they have complied with all environmental
laws and regulations applicable to the Properties.
(h) Absence of Litigation. Other than the Asserted Claims, the
aforesaid claims made by the holders of the mortgages encumbering the Lightstone
I Properties (other than the West Manchester Mall) and the Lightstone III
Properties, claims made by Wachovia with respect to the aforesaid mezzanine loan
which it made to Macon Burlington, matters covered by insurance, and the matters
described in Exhibit G-1 attached hereto, they have not received written notice
of, nor is there, any pending or, to the best of their knowledge, threatened,
investigation, litigation or administrative proceeding involving them or the
Properties or the ownership, leasing, operation, management, use or maintenance
thereof.
(i) Outstanding Obligations. Other than as described in this
Agreement (and, in particular, in Section 5.03 hereof), to the best of their
knowledge, there are no unpaid sums in excess of $25,000 that are due and owning
under any law, lease, license or permit or any service, energy, utility or other
agreement relating to the Properties, except for (i) unpaid real estate taxes at
the IATG Property in the approximate amount of $2,800,000.00, which unpaid taxes
are being contested, and (ii) operating expenses payable in the ordinary course
of business (and which are not outstanding more than sixty (60) days).
(j) Arms Length Transaction. They have agreed to the
provisions of this Agreement in lieu of Presidential pursuing the Asserted
Claims. Throughout the negotiation, preparation and execution of this Agreement
they have been represented by competent legal counsel of their own choosing.
This Agreement was entered into out of their free-will pursuant to arms-length
negotiations and they believe this Agreement is fair. Presidential has not taken
advantage of them by threats, intimidation, overreaching, unconscionable conduct
or otherwise and they are proceeding in this transaction as volunteers in what
they perceive to be their own best interest.
(k) Insurance Requirements. As of the date hereof, they have
not received (and have no knowledge of) any notice or request from any insurance
company or Board of Fire Underwriters (or organization exercising functions
similar thereto) requesting the performance of any material work or alteration
in respect of the Properties.
(l) Third Party Rights. No person, firm or entity, has any
rights in or right to acquire the Properties or any part thereof including, but
not limited to, a right of first refusal to acquire the Properties or any part
thereof, other than the holders of the aforesaid first mortgages encumbering the
Properties.
(m) Recitals. The statements set forth in the Recitals to this
Agreement are true and correct in all material respects with respect to the
▇▇▇▇▇▇▇▇▇▇▇▇ Parties.
2.02 Representations and Warranties of the Presidential Parties.
----------------------------------------------------------
The Presidential Parties do hereby represent and warrant to the ▇▇▇▇▇▇▇▇▇▇▇▇
Parties as follows:
(a) Organization and Authority. Each is duly formed,
organized, validly existing and in good standing under the laws of Delaware. As
of the date of this Agreement and at all times hereafter, each has and will
continue to have the capacity, right, power and authority to execute this
Agreement and perform its obligations hereunder and to consummate the
transactions described herein or contemplated hereby, including, without
limitation, the execution and delivery of all the Settlement Documents and the
performance of its obligations thereunder.
(b) Compliance. The execution, delivery and performance of
this Agreement and the Settlement Documents by each and the consummation of the
transactions hereby and thereby contemplated will not conflict with any law,
statute or regulation to which each is subject or any judgment, license, order
or permit applicable to each; no consent, approval, authorization or order of
any court, governmental authority or other person is required in connection with
the execution, delivery or performance by each of this Agreement or the
Settlement Documents.
(c) Arms Length Transaction. Each has agreed to the provisions
of this Agreement in lieu of the exercise of its remedies pursuant to the Loan
Documents. Throughout the negotiation, preparation and execution of this
Agreement each has been represented by competent legal counsel of its own
choosing. This Agreement was entered into by each out of its free-will pursuant
to arms-length negotiations and each believes this Agreement is fair. Each has
not been taken advantage of by the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties by threats,
intimidation, overreaching, unconscionable conduct or otherwise and each is
proceeding in this transaction as a volunteer in what it perceives to be its own
best interest.
(d) Recitals. The statements set forth in the Recitals to this
Agreement are true and correct in all material respects with respect to each of
the Presidential Parties.
2.03 Survival. Each Representation and warranty set forth herein shall
survive the delivery of the Settlement Documents provided that those
representations set forth in paragraphs (g), (h), (i) and (k) of Section 2.01,
with respect to the FW Properties, shall survive the delivery of Settlement
Documents for a period of one (1) year only.
ARTICLE III
ASSUMPTION OF INDEBTEDNESS/DELIVERIES
-------------------------------------
In consideration of the releases and loan modifications provided for
herein (which the parties agree provides a tangible benefit to ▇▇▇▇▇▇▇▇▇▇▇▇),
agreed to by Presidential (subject in all respects to Article IV of this
Agreement) and hereinafter described, simultaneously with the execution and
delivery of this Agreement, the Lightstone Parties shall pay, assume liability
for, and make the deliveries hereinafter described, which, in the case of
documents to which any of the Presidential Parties is a party, shall be
countersigned by the Presidential Parties involved (the documents delivered by
one or more of the Lightstone Parties and/or the Presidential Parties pursuant
to this Agreement being sometimes collectively referred to as the "Settlement
Documents").
3.01 Presidential's Costs and Expenses. Upon the execution of this
Agreement, ▇▇▇▇▇▇▇▇▇▇▇▇ has paid to Presidential, by wire transfer to an account
designated by Presidential, the sum of $250,000, which amount represents the
estimated cost to Presidential for legal and accounting fees and due diligence
expenses in negotiating, drafting and carrying out the terms of this Agreement.
3.02 $750,000 Note. Upon the execution of this Agreement, ▇▇▇▇▇▇▇▇▇▇▇▇
has executed and delivered to Presidential a $750,000 promissory note,
substantially in the form annexed hereto and made a part hereof as Exhibit H
(the "$750,000 Note"). As security for the payment of the $750,000 Note,
▇▇▇▇▇▇▇▇▇▇▇▇ has simultaneously herewith executed and delivered to Presidential
a Pledge and Security Agreement (IATG), substantially in the form annexed hereto
and made a part hereof as Exhibit I, collaterally assigning to Presidential a
25% interest in IATG (the "$750,000 Pledge") and, in connection with the
$750,000 Pledge, IATG and Presidential have executed an agreement substantially
in the form annexed hereto as Exhibit I-1 (the "IATG $750,000 Omnibus
Agreement"). (The 25% interest in IATG being pledged herein, together with the
remaining 23% interest in IATG held by ▇▇▇▇▇▇▇▇▇▇▇▇ and the 1% interest in IATG
held by IATG Manager, also serve as collateral security for certain obligations
of ▇▇▇▇▇▇▇▇▇▇▇▇ to Presidential more particularly described in Section 3.05 of
this Agreement and are subject to an option in favor of Pres IATG (as
hereinafter defined) as more particularly described in Section 3.04 of this
Agreement. Said aggregate 48% interest in IATG constitutes all of ▇▇▇▇▇▇▇▇▇▇▇▇'▇
interest in IATG remaining after transferring to Presidential a 50% membership
interest in IATG in accordance with Section 3.04 of this Agreement (other than
the beneficial interest in IATG held by ▇▇▇▇▇▇▇▇▇▇▇▇ as the 99% member of IATG
Manager, the managing member of IATG and the owner of a 1% interest therein)).
3.03 Assumption of Indebtedness/FWI and FWII Properties. In accordance
with the terms and conditions of the documents hereinafter described, including
but not limited to the non-recourse provisions of both the Assumed Indebtedness
Note (as hereinafter defined) and the Consolidated Indebtedness Note (as
hereinafter defined), (i) JJFW, ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners, ▇▇▇▇▇▇▇▇▇▇ ▇▇
Manager, FW Realty Advisors, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, and the DWL 2003
Family Trust (collectively, the "Consolidated Indebtedness Obligors") shall
jointly and severally assume liability (x) in substitution for Lightstone I, for
the first $5,000,003 of the principal amount of the Lightstone I Loan (the
"Lightstone I Assumed Indebtedness"), and (y) in substitution for Lightstone
III, for the first $5,000,003 of the principal amount of the Lightstone III Loan
(the "Lightstone III Assumed Indebtedness" and, together with the Lightstone I
Assumed Indebtedness, the "Assumed Indebtedness"); (ii) ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty
Partners, ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager, FW Realty Advisors, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇.
▇▇▇▇▇▇▇▇▇▇▇▇ and The DWL 2003 Family Trust shall assume liability, with JJFW,
for all sums remaining due and owing under the FWI Loan; (iii) the Assumed
Indebtedness and the amount outstanding with respect to the FWI Loan shall be
consolidated into a single indebtedness of $12,075,000 and, as so consolidated,
the terms thereof shall be modified (said consolidated indebtedness of
$12,075,000, as so modified, being hereinafter referred to as the "Consolidated
Indebtedness"); (iv) in order to facilitate and secure the payment of the
Consolidated Indebtedness, the Consolidated Indebtedness Obligors are assigning
to Presidential their right to exercise control of and receive distributions
from any and all ▇▇▇▇▇▇▇▇▇▇▇▇ Parties having an interest, directly or
indirectly, in the FWI Properties and/or the FWII Properties and otherwise
pledging all of their right, title and interest in such parties; and (v)
▇▇▇▇▇▇▇▇▇▇▇▇ shall guaranty certain limited obligations of the Consolidated
Indebtedness Obligors pursuant to the Limited Recourse Guaranty referred to in
subsection 18 of this Section 3.03 below. In connection therewith, certain of
the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties, and where required, Presidential (subject in all
respects to Article IV of this Agreement), shall simultaneously herewith execute
and/or deliver the following documents (all of even date herewith unless
otherwise indicted):
1. A Promissory Note in the principal amount of $10,000,006,
from the Consolidated Indebtedness Obligors to Presidential, substantially in
the form annexed hereto and made a part hereof as Exhibit J (the "Assumed
Indebtedness Note");
2. An Assumption, Consolidation and Note Modification
Agreement by and between the Consolidated Indebtedness Obligors and
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit K (the "Assumption, Consolidation, Modification Agreement");
3. A Consolidated Promissory Note in the amount of the
Consolidated Indebtedness, from the Consolidated Indebtedness Obligors to
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit L (the "Consolidated Indebtedness Note");
4. An Assignment, Security and Pledge Agreement (▇▇▇▇▇▇▇▇▇▇ ▇▇
Manager), by and between ▇▇▇▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and Presidential,
substantially in the form annexed hereto and made a part hereof as Exhibit M
(the "▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ FW Manager Pledge");
5. An Agreement between ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager and
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit N (the "▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager Omnibus Agreement");
6. An Amended and Restated Assignment, Security and Pledge
Agreement (▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners), by and between ▇▇▇▇▇▇▇▇▇▇▇▇ and
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit O (the "▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ FW Realty Partners Amended Pledge");
7. An Agreement between ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners and
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit P (the "▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners Restated Omnibus Agreement");
8. An Assignment, Security and Pledge Agreement (FW Realty
Advisors), by and between ▇▇▇▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and Presidential,
substantially in the form annexed hereto and made a part hereof as Exhibit Q
(the "▇▇▇▇▇▇▇▇▇▇▇▇ - FW Realty Advisors Pledge");
9. An Agreement between FW Realty Advisors and Presidential,
substantially in the form annexed hereto and made a part hereof as Exhibit R
(the "FW Realty Advisors Omnibus Agreement");
10. An Assignment, Security and Pledge Agreement (▇▇▇▇▇▇▇▇▇▇
▇▇ Investment), by and between ▇▇▇▇▇▇▇▇▇▇▇▇ and the DWL 2003 Family Trust and
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit S (the "▇▇▇▇▇▇▇▇▇▇▇▇/2003 Trust - ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment Pledge");
11. An Agreement between ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment and
Presidential substantially in the form annexed hereto and made a part hereof as
Exhibit T (the "▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment Omnibus Agreement");
12. An Assignment, Security and Pledge Agreement, by and
between ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager and Presidential, substantially in the form
annexed hereto and made a part hereof as Exhibit U (the "▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager
Pledge");
13. An Agreement between the FW Fee Owners and Presidential
substantially in the form annexed hereto and made a part hereof as Exhibit V
(the "FW Fee Owners Omnibus Agreement");
14. An Assignment, Security and Pledge Agreement, by and
between ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners and Presidential, substantially in the
form annexed hereto and made a part hereof as Exhibit W (the "▇▇▇▇▇▇▇▇▇▇ ▇▇
Realty Partners Pledge");
15. An Agreement between the FWI Fee Owners and Presidential
substantially in the form annexed hereto and made a part hereof as Exhibit X
(the "FWI Fee Owner Omnibus Agreement");
16. An Assignment, Security and Pledge Agreement, by and
between FW Realty Advisors and Presidential, substantially in the form annexed
hereto and made a part hereof as Exhibit Y (the "FW Realty Advisors Pledge");
17. An Agreement between ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners and
Presidential substantially in the form annexed hereto and made a part hereof as
Exhibit Z (the "▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners Omnibus Agreement");
18. A Limited Recourse Guaranty from ▇▇▇▇▇▇▇▇▇▇▇▇ to
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit AA (the "Consolidated Indebtedness Limited Recourse Guaranty");
19. Subject in all respects to Article IV of this Agreement, a
Termination of the FWI Loan Agreement by and between Presidential and JJFW,
substantially in the form annexed hereto and made a part hereof as Exhibit BB
(the "FWI Loan Termination Agreement");
20. Subject in all respects to Article IV of this Agreement, a
Termination of the FWI Guaranties, substantially in the form annexed hereto and
made a part hereof as Exhibit CC (the "Termination of the FWI Guaranties");
21. An Amended and Restated Environmental Indemnity Agreement
with respect to the FW Properties, substantially in the form annexed hereto and
made a part hereof as Exhibit DD (the "Amended and Restated Environmental
Indemnity Agreement");
22. The Lightstone I Partial Release from Presidential (as
hereinafter defined); and
23. The Lightstone III Partial Release from Presidential (as
hereinafter defined).
3.04 IATG.
(a) ▇▇▇▇▇▇▇▇▇▇▇▇ shall assign to Pres IATG, a wholly owned
subsidiary of Presidential, ownership of a 50% membership interest in IATG,
pursuant to an Assignment and Assumption of Membership Interest (IATG Puerto
Rico, LLC) substantially in the form annexed hereto and made a part hereof as
Exhibit FF (the "IATG Assignment"). In addition, IATG Manager, Pres IATG,
▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall execute and deliver an Amended and Restated
Operating Agreement of IATG, substantially in the form annexed hereto and made a
part hereof as Exhibit GG (the "Amended and Restated IATG Operating Agreement"),
pursuant to which, among other things, (i) the consent of Pres IATG will be
required for the sale, refinancing or lease of the IATG Property; (ii) Pres IATG
has been granted a certain priority with respect to the distribution of net
proceeds of a capital transaction by IATG; (iii) IATG Manager has agreed to
advance any additional capital which IATG may need to carry on the business of
IATG, excluding costs associated with tenant fit-up or leasing commissions; and
(iv) in the event IATG Manager fails to make such advances, Pres IATG shall have
the option to acquire (x) the ownership interest of IATG Manager in IATG, and
(y) the then ownership interests in IATG held by ▇▇▇▇▇▇▇▇▇▇▇▇ (remaining after
said ownership interests held by ▇▇▇▇▇▇▇▇▇▇▇▇ have been transferred in
accordance with the $750,000 Pledge and/or the $500,000 Lightstone II - IATG
Pledge (▇▇▇▇▇▇▇▇▇▇▇▇) (as hereinafter defined)) for $50 for each one (1%)
percent interest in IATG held by IATG Manager or ▇▇▇▇▇▇▇▇▇▇▇▇, as the case may
be, and purchased by Pres IATG. Further, IATG, IATG Manager and ▇▇▇▇▇▇▇▇▇▇▇▇
shall execute and deliver for the benefit of Presidential, Pres IATG and
▇▇▇▇▇▇▇, an Environmental Indemnity Agreement in substantially the form attached
hereto as Exhibit HH (the "IATG Environmental Indemnity Agreement").
(b) Notwithstanding anything in this Agreement to the
contrary, the parties recognize that IATG Manager has no interest in remaining
as the manager of IATG, holding a 1% interest in IATG, if the remaining 99% of
the membership interests are held by Presidential, Pres IATG, ▇▇▇▇▇▇▇, and/or
their respective affiliates or successors. Accordingly, if Presidential
forecloses on the Lightstone II - IATG Pledge (▇▇▇▇▇▇▇▇▇▇▇▇) (as hereinafter
defined) it shall simultaneously foreclose on the Lightstone II - IATG Pledge
(IATG Manager) (as hereinafter defined) and, if Presidential exercises the
option described in paragraph (a) above with respect to only one of ▇▇▇▇▇▇▇▇▇▇▇▇
or IATG Manager (but not the other), it shall also be deemed to have exercised
said option with respect to the other.
3.05 Lightstone II Loan. Except as specifically set forth below, the
terms and conditions of the Lightstone II Loan, and the respective obligations
of the Lightstone Parties with respect thereto, shall remain unmodified and in
full force and effect. Notwithstanding the foregoing, Lightstone and
Presidential have executed and delivered the following documents either (i)
modifying certain of such obligations, and/or (ii) as security for such modified
obligations:
1. Subject in all respects to Article IV of this Agreement, a
First Modification to Loan Agreement and Operating Agreement, which principally
modifies the Lightstone II Loan Agreement and the Lightstone II Operating
Agreement with respect to (i) the manner in which the net proceeds of a capital
event shall be distributed, and (ii) certain of Presidential's rights upon the
occurrence of a default under the Lightstone II Loan Agreement, substantially in
the form annexed hereto and made a part hereof as Exhibit II (the "Lightstone II
Loan/Operating Agreement Modification Agreement");
2. Subject in all respects to Article IV of this Agreement, an
Amended and Restated Guaranty, which modifies and restates ▇▇▇▇▇▇▇▇▇▇▇▇'▇
personal obligations under the Lightstone II Guaranty, substantially in the form
annexed hereto and made a part hereof as Exhibit JJ (the "Lightstone II Restated
Guaranty");
3. An Amended and Restated Promissory Note made by Lightstone
II to the order of Presidential in the original principal amount of
$7,835,000.00, substantially in the form annexed hereto and made a part hereof
as Exhibit KK (the "Lightstone II Amended Note");
4. A Modification and Reaffirmation of Security and Pledge
Agreement between Presidential and Lightstone II, substantially in the form
annexed hereto and made a part hereof as Exhibit LL (the "Lightstone II Amended
Pledge Agreement");
5. An Agreement between Shawnee Mall LLC and Presidential,
substantially in the form annexed hereto and made a part hereof as Exhibit MM
(the "Shawnee Reaffirmed Omnibus Agreement");
6. An Agreement between Brazos Outlets Center LLC and
Presidential, substantially in the form annexed hereto and made a part hereof as
Exhibit NN (the "Brazos Reaffirmed Omnibus Agreement");
7. A Modification and Reaffirmation of Environmental Indemnity
Agreement between Presidential, ▇▇▇▇▇▇▇▇▇▇▇▇, Brazos Outlets Center LLC, Shawnee
Mall LLC and Lightstone II, substantially in the form annexed hereto and made a
part hereof as Exhibit OO (the "Lightstone II Amended Environmental Indemnity");
8. A Pledge and Security Agreement (Lightstone Loan II -
IATG), in which ▇▇▇▇▇▇▇▇▇▇▇▇ grants to Presidential a security interest in his
then membership interest in IATG (as the same may have been reduced based upon
either (i) a transfer to Pres IATG in accordance with the option described in
Section 3.04 of this Agreement, or (ii) a transfer thereof in accordance with
the $750,000 Pledge Agreement ) as security for certain obligations of
▇▇▇▇▇▇▇▇▇▇▇▇ under the Lightstone II Restated Guaranty, pertaining to $500,000
of the amount due and owing under the Lightstone II Loan, substantially in the
form annexed hereto and made a part hereof as Exhibit PP (the "$500,000
Lightstone II - IATG Pledge (▇▇▇▇▇▇▇▇▇▇▇▇)") and, in connection therewith, IATG
and Presidential have executed an agreement substantially in the form annexed
hereto as Exhibit PP-1 (the "IATG (▇▇▇▇▇▇▇▇▇▇▇▇) $500,000 Omnibus Agreement").
The $750,000 Pledge and the $500,000 Lightstone II - IATG Pledge (▇▇▇▇▇▇▇▇▇▇▇▇)
are coordinate in priority. If the collateral subject to the $750,000 Pledge is
realized upon prior to the collateral subject to the $500,000 Lightstone II -
IATG Pledge (▇▇▇▇▇▇▇▇▇▇▇▇) being realized upon, then the $500,000 Lightstone II
- IATG Pledge (▇▇▇▇▇▇▇▇▇▇▇▇) will cover ▇▇▇▇▇▇▇▇▇▇▇▇'▇ remaining 23% interest in
IATG. Likewise, if the collateral subject to the $500,000 Lightstone II - IATG
Pledge is realized upon prior to the collateral subject to the $750,000 Pledge
being realized upon, the $750,000 Pledge will no longer encumber any
collateral.;
9. A Pledge and Security Agreement (Lightstone II - IATG (IATG
Manager), in which IATG Manager grants to Presidential a security interest in
its membership interest in IATG as security for the obligations of ▇▇▇▇▇▇▇▇▇▇▇▇
under the Lightstone II Restated Guaranty, pertaining to $500,000 of the amount
due and owing under the Lightstone II Loan, substantially in the form annexed
hereto and made a part hereof as Exhibit PP-2 (the "$500,000 Lightstone II -
IATG Pledge (IATG Manager)") and, in connection therewith, IATG and Presidential
have executed an agreement substantially in the form annexed hereto as Exhibit
PP-3 (the "IATG (IATG Manager) $500,000 Omnibus Agreement").
10. Subject in all respects to Article IV of this Agreement, a
Partial Release (Lightstone II Limited Recourse Guaranty) from Presidential,
releasing ▇▇▇▇▇▇▇▇▇▇▇▇ from certain previous defaults by ▇▇▇▇▇▇▇▇▇▇▇▇ under the
Lightstone II Limited Recourse Guaranty and/or under the Lightstone II Operating
Agreement, substantially in the form annexed hereto and made a part hereof as
Exhibit QQ (the "Lightstone II Partial Release of Guaranty"); and
11. A Release from ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ II of all prior
obligations of Presidential under the Lightstone II Loan Agreement and the
Lightstone II Operating Agreement, substantially in the form annexed hereto and
made a part hereof as Exhibit RR (the "Lightstone II Release From
▇▇▇▇▇▇▇▇▇▇▇▇").
3.06 Lightstone I Loan. Subject in all respects to Article IV
of this Agreement, Presidential shall (i) release Lightstone I from any and all
further liability with respect to the Lightstone I Assumed Indebtedness, (ii)
subject in all respects to Article IV of this Agreement, release from the
Lightstone I Pledge the ownership interests in West Manchester Mall LLC, (iii)
terminate the Lightstone I Guaranty, and (iv) assign to ▇▇▇▇▇▇▇▇▇▇▇▇
Presidential's interest in Lightstone I. In connection therewith Presidential,
Lightstone I and/or ▇▇▇▇▇▇▇▇▇▇▇▇ shall execute and deliver:
1. Subject in all respects to Article IV of this Agreement, a
Release from Presidential, releasing Lightstone I and ▇▇▇▇▇▇▇▇▇▇▇▇,
respectively, from any and all liability under the Lightstone I Loan Agreement,
the Lightstone I Operating Agreement, the Lightstone I Pledge or otherwise with
respect to the Lightstone I Loan, to the extent of the Lightstone I Assumed
Indebtedness and with respect to certain of the Asserted Claims, substantially
in the form annexed hereto and made a part hereof as Exhibit SS (the "Lightstone
I Partial Release from Presidential");
2. Subject in all respects to Article IV of this Agreement, a
Release from Presidential of the ownership interests in West Manchester Mall LLC
from the Lightstone I Pledge substantially in the form attached hereto as
Exhibit SS-1 (the "West Manchester Pledge Partial Release from Presidential"),
together with an amendment, substantially in the form attached hereto as Exhibit
SS-2, to the UCC filed to perfect the Lightstone I Pledge (the "West Manchester
UCC Amendment from Presidential);
3. A Release from ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ I, releasing
Presidential from any and all liability with respect to the Lightstone I Loan
Agreement, the Lightstone I Operating Agreement, or otherwise with respect to
the Lightstone I Loan, substantially in the form annexed hereto and made a part
hereof as Exhibit TT (the "Lightstone I Release from ▇▇▇▇▇▇▇▇▇▇▇▇");
4. Subject in all respects to Article IV of this Agreement, an
Assignment by Presidential of its ownership interests in Lightstone I to
▇▇▇▇▇▇▇▇▇▇▇▇, substantially in the form attached hereto and made a part hereof
as Exhibit SS-3 (the "Lightstone I Assignment");
5. A consent by Presidential, substantially in the form
annexed hereto and made a part hereof as Exhibit SS-4 (the "Lightstone I Consent
To Resolution of Senior Loan From Presidential") to the holder of the first
mortgage encumbering the Lightstone I Properties (other than the West Manchester
Mall) taking certain actions with respect to its loan; and
6. Subject in all respects to Article IV of this Agreement, a
release and termination of the Lightstone I Guaranty, substantially in the form
annexed hereto and made a part hereof as Exhibit UU (the "Lightstone I Guaranty
Release and Termination").
3.07 PRC Loan. ▇▇▇▇▇▇▇▇▇▇▇▇ and Presidential shall release each
other from any and all further liability with respect to the PRC Loan and
terminate the PRC Guaranty. In connection therewith PRC, Presidential and/or
▇▇▇▇▇▇▇▇▇▇▇▇ shall execute and deliver:
1. A Release/Termination from ▇▇▇▇▇▇▇▇▇▇▇▇ and PRC releasing
Presidential from any and all liability under the PRC Loan Agreement, the PRC
Guaranty, the PRC Operating Agreement, or otherwise with respect to the PRC Loan
and terminating the PRC Guaranty, substantially in the form annexed hereto and
made a part hereof as Exhibit VV (the "Presidential Release from ▇▇▇▇▇▇▇▇▇▇▇▇
and PRC");
2. Subject in all respects to Article IV of this Agreement, a
Release from PRC and Presidential, releasing ▇▇▇▇▇▇▇▇▇▇▇▇ from any and all
liability with respect to the PRC Loan Agreement, the PRC Operating Agreement or
otherwise with respect to the PRC Loan, substantially in the form annexed hereto
and made a part hereof as Exhibit WW (the "PRC Release from Presidential"); and
3. Subject in all respects to Article IV of this Agreement, an
assignment by Presidential of its ownership interests in PRC to ▇▇▇▇▇▇▇▇▇▇▇▇,
substantially in the form attached hereto as Exhibit XX-1 (the "PRC
Assignment").
3.08 Lightstone III Loan. Subject in all respects to Article IV of this
Agreement, Presidential shall release Lightstone III from any and all further
liability with respect to the Lightstone III Assumed Indebtedness. In connection
therewith Presidential, Lightstone III and/or ▇▇▇▇▇▇▇▇▇▇▇▇ shall execute and
deliver:
1. Subject in all respects to Article IV of this Agreement, a
Release from Presidential, releasing Lightstone III and ▇▇▇▇▇▇▇▇▇▇▇▇,
respectively, from any and all liability under the Lightstone III Loan
Agreement, the Lightstone III Operating Agreement, the Lightstone III Pledge, or
otherwise with respect to the Lightstone III Loan to the extent of the
Lightstone III Assumed Indebtedness and with respect to certain of the Asserted
Claims, substantially in the form annexed hereto and made a part hereof as
Exhibit YY (the "Lightstone III Partial Release from Presidential");
2. A Release from ▇▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ III, releasing
Presidential from any and all liability with respect to the Lightstone III Loan
Agreement, the Lightstone III Operating Agreement, or otherwise with respect to
the Lightstone III Loan, substantially in the form annexed hereto and made a
part hereof as Exhibit ZZ (the "Lightstone III Release from ▇▇▇▇▇▇▇▇▇▇▇▇");
3. A consent by Presidential, substantially in the form
annexed hereto and made a part hereof as Exhibit ZZ-1 (the "Lightstone III
Consent to Resolution of Senior Loans From Presidential"), to the holder of the
first mortgage encumbering the Lightstone III Properties and the successor to
Wachovia with respect to the Macon Burlington Mezz Loan taking certain actions
with respect to their respective loans;
4. Subject in all respects to Article IV of this Agreement, a
release and termination of the Lightstone III Guaranty from Presidential,
substantially in the form annexed hereto and made a part hereof as Exhibit AAA
(the "Lightstone III Guaranty Release and Termination"); and
5. Subject in all respects to Article IV of this Agreement, an
Assignment by Presidential of its ownership interests in Lightstone III to
▇▇▇▇▇▇▇▇▇▇▇▇, substantially in the form attached hereto and made a part hereof
as Exhibit AAA-1 (the "Lightstone III Assignment").
3.09 All Other Matters. In order to resolve all other possible claims
which Presidential or ▇▇▇▇▇▇▇▇▇▇▇▇ may have against each other relating to any
matter other than those matters referred to in this Settlement Agreement,
Presidential shall deliver to ▇▇▇▇▇▇▇▇▇▇▇▇ a release substantially in the form
attached hereto as Exhibit BBB (the "Other Matters Release From Presidential")
and ▇▇▇▇▇▇▇▇▇▇▇▇ shall deliver to Presidential a release substantially in the
form annexed hereto as Exhibit CCC (the "Other Matters Release From
▇▇▇▇▇▇▇▇▇▇▇▇").
ARTICLE IV
CONDITIONS PRECEDENT TO FULL EFFECTIVENESS OF PRESIDENTIAL RELEASES;
REINSTATEMENT AND REVIVAL OF PRESIDENTIAL'S RIGHTS AND REMEDIES AGAINST
▇▇▇▇▇▇▇▇▇▇▇▇ AND THE ▇▇▇▇▇▇▇▇▇▇▇▇ PARTIES
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4.01 Conditions Precedent to Effectiveness. The releases of claims,
causes of action, damages, liabilities or demands, whether in law or in equity,
against ▇▇▇▇▇▇▇▇▇▇▇▇ or any of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties provided for under this
Agreement shall be of no force and effect until the date that is ninety-one (91)
days following the execution and delivery by ▇▇▇▇▇▇▇▇▇▇▇▇ and each of the
▇▇▇▇▇▇▇▇▇▇▇▇ Parties of this Agreement and all Settlement Documents and the
closing of the transactions contemplated hereby (the "Ninety Day Period");
provided, however, that Presidential must forbear and refrain, during the Ninety
Day Period, from the exercise or enforcement of any and all of those rights,
claims, causes of action, damages, liabilities or demands in the same manner as
if such releases were effective so long as none of ▇▇▇▇▇▇▇▇▇▇▇▇ or the
▇▇▇▇▇▇▇▇▇▇▇▇ Parties has voluntarily commenced a bankruptcy, reorganization or
insolvency case under Title 11 of the United States Code or similar law, or
become the subject of an involuntary case under Title 11 of the United States
Code or similar laws, which involuntary case has not been dismissed within 90
days of its filing (an "Involuntary Case"), or made an assignment for the
benefit of creditors during the Ninety Day Period. If ▇▇▇▇▇▇▇▇▇▇▇▇ or any of the
▇▇▇▇▇▇▇▇▇▇▇▇ Parties has voluntarily commenced such a bankruptcy, reorganization
or insolvency case under Title 11 of the United States Code or similar law, or
made an assignment for the benefit of creditors at any time during the Ninety
Day Period (any such instance is referred to hereinafter as a "Voluntary Case"),
or remains the subject of an Involuntary Case that is not dismissed for more
than 90 days after the date of its filing, then Presidential, in its sole and
absolute discretion, shall have the option (the "Option") either (A) to pursue
any and all remedies which it may have against ▇▇▇▇▇▇▇▇▇▇▇▇ and each of the
▇▇▇▇▇▇▇▇▇▇▇▇ parties for any breach of this Agreement and/or any of the
Settlement Documents (in which case the aforesaid releases shall be effective),
or (B) to repay the full amount of all payments received from ▇▇▇▇▇▇▇▇▇▇▇▇ and
all ▇▇▇▇▇▇▇▇▇▇▇▇ Parties, exclusive of amounts paid to Presidential pursuant to
Section 3.01 of this Agreement, and to return or re-convey all transfers of
property made by ▇▇▇▇▇▇▇▇▇▇▇▇ and/or any of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties pursuant to
this Agreement or any of the Settlement Documents and to release all obligations
of ▇▇▇▇▇▇▇▇▇▇▇▇ and/or any of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties made pursuant to this
Agreement or any of the Settlement Documents. The Option must be exercised in
writing by Presidential within 60 days of the filing of a Voluntary Case, or
within 150 days of the filing of an Involuntary Case that is not dismissed
within ninety days of its filing. In the event that Presidential chooses option
(B) above, this Agreement and each of the Settlement Documents shall be deemed
null and void and, exclusive of the amounts paid to Presidential pursuant to
Section 3.01 of this Agreement, the parties shall be restored to the status quo
ante as of the day immediately preceding the date of execution of this Agreement
as though the execution of this Agreement and the Settlement Documents never
occurred, and in such event, (1) nothing contained herein shall be deemed to
constitute a waiver or release by either party of any of its rights, claims,
causes of action, damages, liabilities or demands, at law or in equity, and (2)
nothing contained in this Agreement shall be deemed to prejudice in any manner
any rights of Presidential, ▇▇▇▇▇▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties. In the
event of any conflict between this Section 4.01 and Section 4.02, the provisions
of this Section 4.01 shall govern and control.
4.02 Disgorgement. If ▇▇▇▇▇▇▇▇▇▇▇▇ or any of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties
makes a payment or payments, or transfers property to Presidential pursuant to
this Agreement or the Settlement Documents, which payment(s), or any part
thereof, Presidential is subsequently required to disgorge to, or which property
transfer or any part thereof is subsequently avoided by, ▇▇▇▇▇▇▇▇▇▇▇▇, any of
the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties, a trustee, custodian, receiver, assignee for the
benefit of creditors, or any other person having the right to bring any such
action or having control of or responsibility for the assets of ▇▇▇▇▇▇▇▇▇▇▇▇ or
any of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties, as a preference, fraudulent transfer or
fraudulent conveyance under any applicable state or federal law pursuant to a
final, non-appealable court order entered by a court of competent jurisdiction,
then to the extent of such disgorgement only, and in the case of property
transfer(s) only to the extent of the fair market value of the avoided property
that was transferred to Presidential, the obligation of ▇▇▇▇▇▇▇▇▇▇▇▇ or of the
▇▇▇▇▇▇▇▇▇▇▇▇ Part(ies) intended to be satisfied by such disgorged payment(s) or
voided property transfer(s)shall be deemed to be revived in full force and
effect as of the date of such disgorgement or avoidance, and in such event,
nothing contained herein shall be deemed to be a waiver or release by
Presidential of any of its claims or rights with respect to the reinstated
obligation.
ARTICLE V
FURTHER AGREEMENTS OF THE PARTIES
WITH RESPECT TO THE FW PROPERTIES
----------------------------------
5.01 $750,000 Cash Collateral.
------------------------
(a) ▇▇▇▇▇▇▇▇▇▇▇▇ represents and warrants to Presidential that
he has advanced the sum of $750,000 (the "Cash Collateral"), which has been
deposited in a money market account with New York Community Bank (together with
its successors and assigns, hereinafter "NYCB"), the holder of the first
mortgages made by the FW Fee Owners and encumbering the FW Properties, as
further security for the payment of the indebtednesses secured by said first
mortgages. ▇▇▇▇▇▇▇▇▇▇▇▇ further represents and warrants that no other
▇▇▇▇▇▇▇▇▇▇▇▇ Party or any member thereof, including the Group A Members, has any
interest in the Cash Collateral. ▇▇▇▇▇▇▇▇▇▇▇▇ agrees that he shall continue to
maintain such money market account and the Cash Collateral shall continue to
serve as security for such indebtednesses, including but not limited to any
extension of the term thereof and regardless of whether the terms of the subject
loan(s) are modified, provided, however, that if any such refinancing with NYCB
includes additional loan proceeds received by the FW Fee Owners and the Cash
Collateral must remain as security for the indebtedness, said additional
proceeds shall be applied first to reimburse the Cash Collateral provided by
▇▇▇▇▇▇▇▇▇▇▇▇.
(b) To the extent that the Cash Collateral is actually
returned by NYCB at any time or is credited against any of the aforesaid
indebtednesses when any portion of such indebtednesses is paid off (whether at
maturity or by a prepayment made prior to maturity), notwithstanding anything in
the Settlement Documents to the contrary, it shall be paid to ▇▇▇▇▇▇▇▇▇▇▇▇.
Notwithstanding the foregoing, should NYCB foreclose any of its mortgages
against any of the FW Properties or any of the FW Properties are conveyed by
deed in lieu of foreclosure, and the Cash Collateral is retained by NYCB and
applied against the subject indebtedness, ▇▇▇▇▇▇▇▇▇▇▇▇ shall have no further
right to the Cash Collateral, except to the extent that the FW Fee Owners
receive any surplus proceeds attributable to the sale of the FW Properties at
foreclosure (up to the amount of the Cash Collateral).
(c) To the extent that ▇▇▇▇▇▇▇▇▇▇▇▇ is entitled to the return
of the Cash Collateral in accordance with the foregoing and when returned or
credited it is with interest, he shall also be entitled to receive said
interest.
5.02 Repair and Restoration Reserve. ▇▇▇▇▇▇▇▇▇▇▇▇ represents that there
exists one or more segregated accounts, controlled by NYCB or the managing agent
for the FW Properties (the "Replacement and Reserve Account"), in which the sum
of approximately $195,000.00 is being held for the purpose of making repairs or
improvements approved by NYCB and/or the United States Department of Housing and
Urban Development ("HUD") with respect to the FW Properties. The ▇▇▇▇▇▇▇▇▇▇▇▇
Parties relinquish any and all claims or rights with respect to the Replacement
and Reserve Account. Pursuant to the authority granted to Presidential in
accordance with the Settlement Documents, Presidential may from time to time
request that the aforesaid entities having rights of approval with respect to
the use of the Replacement and Reserve Account permit the same to be used on
account of repairs or improvements designated by Presidential or otherwise in
accordance with the terms of any agreement governing disbursements from said
account.
5.03 Operating Expenses/Prepaid Rents. Notwithstanding anything in this
Agreement to the contrary, ▇▇▇▇▇▇▇▇▇▇▇▇ represents and warrants that (a) there
has not been made to any members of the FW Fee Owners any distributions of any
rent or other receipts collected with respect to the FW Properties on or after
February 1, 2009, (b) all bills received by the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties or the
party managing the FW Properties (the "FW Property Manager") on or prior to
January 1, 2009, and/or which were due and payable on or prior to February 1,
2009, have been paid, and (c) the payments due February 1, 2009 on the mortgage
loans made by NYCB with respect to the FW Properties have been paid and said
mortgage loans are in good standing.
5.04 ▇▇▇▇▇▇▇▇▇▇▇▇ Loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment/▇▇ ▇▇
Undistributed NOI.
----------------------------------------------------
(a) ▇▇▇▇▇▇▇▇▇▇▇▇ represents that (i) he and Lightstone Real
Estate Partners LP (collectively "Assignors") have made certain non-interest
bearing loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment, which it has contributed or loaned to
the ▇▇ ▇▇ Fee Owners to pay expenses and/or debt service associated with the ▇▇
▇▇ Properties (the "Loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment"); and (ii) the principal
balance due and owing to Assignors with respect to the Loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇
Investment is $126,492. In accordance with that certain Assignment attached
hereto as Exhibit CCC-1 (the "Assignment of Loans Made to ▇▇▇▇▇▇▇▇▇▇ ▇▇
Investment"), Assignors shall assign to Presidential all of their right, title
and interest to the Loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment in excess of the
Assignors' Share of the ▇▇ ▇▇ Undistributed NOI (as hereinafter defined).
(b) Notwithstanding anything in this Article V to the
contrary, the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties represent that to the best of their knowledge
there is approximately $125,000 of undistributed net operating income from 2008
with respect to the FWII Properties (the "▇▇ ▇▇ Undistributed NOI") and that the
distribution thereof is subject to the approval of HUD. The parties to this
Agreement acknowledge that they will use their reasonable efforts to obtain the
approval of HUD to the release of the ▇▇ ▇▇ Undistributed NOI and, when released
by HUD, it shall be distributed to the members of the ▇▇ ▇▇ Fee Owners in
accordance with the terms of the organizational documents governing the FWII Fee
Owners and, upon receipt by the ▇▇ ▇▇ Fee Owners, will be distributed to
▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment. Upon receipt by ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment it will be
utilized by ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment to repay the Loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇
Investment. Assignors shall be entitled to receive therefrom an amount (the
"Assignors' Share of the ▇▇ ▇▇ Undistributed NOI") equal to the least of (i)
one-half of the ▇▇ ▇▇ Undistributed NOI, (ii) $63,246, and (iii) one half of the
principal balance of the Loans to ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment. The balance shall
belong to Presidential in accordance with the Assignment of Loans made to
▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment.
5.05 Property Manager. In order to facilitate Presidential exercising
the rights and powers granted to it with respect to the FW Properties, the FW
Owners shall execute and deliver a letter to the FW Property Manager, directing
it to report to, be supervised by, and take direction from, Presidential, in the
form annexed hereto and made a part hereof as Exhibit DDD (the "FW Property
Manager Letter of Direction").
5.06 Insurance. ▇▇▇▇▇▇▇▇▇▇▇▇ represents that the FW Properties are
insured under blanket policies which cover other properties controlled by
▇▇▇▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ will cause the insurance policies covering the FW
Properties to be maintained until April 1, 2010, unless advised by Presidential
that it has caused replacement policies to be obtained. Presidential shall cause
the FW Fee Owners to pay to ▇▇▇▇▇▇▇▇▇▇▇▇ an amount equal to the annual premiums
payable by ▇▇▇▇▇▇▇▇▇▇▇▇ with respect to the FW Properties when that blanket
policy is renewed (on or before April 1, 2009) and, thereafter, ▇▇▇▇▇▇▇▇▇▇▇▇
shall provide to the FW Property Manager (to provide to NYCB) evidence that said
premiums have been paid. To the extent that the policy is subsequently
cancelled, the prepaid premiums returned by ▇▇▇▇▇▇▇▇▇▇▇▇'▇ insurance carrier(s)
shall be returned to the FW Property Manager to be credited to the FW Fee
Owners, respectively (subject to Presidential's rights with respect thereto).
5.07 Indemnification. Subject to the following, Presidential shall
indemnify, defend and hold harmless the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties from and against
any direct claim, action, suit or proceeding, brought or enacted against any
▇▇▇▇▇▇▇▇▇▇▇▇ Party, by reason of any act, or failure or refusal to act, by
Presidential with respect to the FW Properties, provided that the ▇▇▇▇▇▇▇▇▇▇▇▇
Parties shall give Presidential reasonably prompt notice of the assertion of any
such claim, etc. and cooperate fully with Presidential in the investigation and
defense thereof. Such indemnification shall not apply to the extent the claim is
attributable to a material breach by any of the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties under the
Settlement Documents. Further, Presidential's obligations under this Section
5.07 are limited to Presidential's interest in the FW Properties or the proceeds
thereof.
ARTICLE VI
MISCELLANEOUS
-------------
6.01 Notices. All notices, demands, consents, requests, instructions
and approvals ("Notice") herein required or permitted shall be in writing and
shall be delivered by a reputable overnight courier that provides a receipt to
sender, or mailed by certified mail, return receipt requested, postage pre-paid,
to the recipient at such recipient's address set forth below (or at such other
address for a party as shall be specified by Notice given pursuant hereto):
If to any ▇▇▇▇▇▇▇▇▇▇▇▇ Party to: The Lightstone Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
and in any of the foregoing
cases with a copy to: The Lightstone Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
and an additional copy to: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
and if to Presidential to: Presidential Realty Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy to: Cuddy & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
All Notices shall be effective and deemed received three days after deposit in
the mail, postage prepaid, if mailed, and upon receipt if sent by overnight
courier. Each Notice shall bear the date on which it is delivered or mailed.
6.02 Entire Agreement; No Oral Changes. This Agreement, the Settlement
Documents, and any other documents executed and delivered contemporaneously
herewith, embody the entire agreement and understanding between Presidential and
the ▇▇▇▇▇▇▇▇▇▇▇▇ Parties relating to the subject matter hereof and supersede all
prior agreements and understandings relating thereto. This Agreement may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is sought.
6.03 Captions. The headings to the Articles and Sections of this
Agreement have been inserted solely for convenience of reference and shall not
modify, define or limit the provisions of this Agreement.
6.04 Governing Law. This Agreement and the other Settlement Documents
have been prepared, negotiated, executed and delivered wholly in the State of
New York and shall be governed by, construed, and enforced in accordance with
the laws of the State of New York applicable to agreements to be performed
entirely within New York.
6.05 Further Assurances. The ▇▇▇▇▇▇▇▇▇▇▇▇ Parties and the Presidential
Parties agree to execute and deliver such other instruments as may be reasonably
requested from time to time by the other to effect and confirm the transactions
described and contemplated hereby.
6.06 Interest Limitation. Notwithstanding anything contained to the
contrary in this Agreement or any of the Settlement Documents, any obligation to
pay interest to Presidential pursuant to the Loan Documents, as modified by the
Settlement Documents, shall be subject to the limitation that such payment of
interest shall not be required to the extent that receipt thereof by
Presidential would be contrary to the provisions of law applicable to
Presidential limiting the maximum rate of interest which may be charged or
collected by Presidential.
6.07 Interpretation. In this Agreement, unless otherwise specified, (i)
singular words include the plural, and plural words include the singular; (ii)
words that include a number of constituent parts, things or elements shall be
construed as referring separately to each constituent part, thing or element
thereof, as well as to such constituent parts, things or elements as a whole;
(iii) all pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural forms thereof, as the context
shall require; (iv) references to any person include its successors and assigns
and, in the case of an individual, the word "successors" includes such
individual's heirs, devisees, legatees, executors, administrators, and personal
representatives; (v) references to any statute or other law include all rules,
regulations and orders adopted or made thereunder and all statutes or other laws
amending, consolidating or replacing the statute or law referred to; (vi)
references to any agreement or other document include all subsequent amendments
or other modifications thereof; (vii) the words "include" and "including", and
words of similar import, shall be deemed to be followed by the words "without
limitation"; (viii) the words "hereto", "herein", "hereof" and "hereunder", and
words of similar import, refer to this Agreement in its entirety; (ix)
references to Articles, Sections or paragraphs are to the Articles, Sections or
paragraphs of this Agreement; (x) references to mortgages shall include deeds of
trust, and references to foreclosure of a mortgage shall include the acts of a
trustee under a deed of trust to realize upon the security for the benefit of
the beneficiary by exercising a power of sale, taking possession of the
mortgaged property, or otherwise.
6.08 Counterparts. This Agreement and each of the Settlement Documents
may be executed in counterparts, and all counterparts so executed shall for all
purposes, respectively, constitute but one agreement, binding on all the parties
hereto or thereto, notwithstanding that all parties shall not have executed the
same counterpart.
6.09 Resolution of Drafting Ambiguities. The parties each acknowledge
that they were represented by experienced counsel in connection with the
preparation, execution and delivery of this Agreement and the Settlement
Documents and that their counsel negotiated all of them on their behalf and that
any rule of construction under any applicable law to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of any of said documents.
6.10 No Waiver; Cumulative Remedies and Rights. Presidential shall not
by any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder, and no waiver shall be valid unless in writing,
signed by Presidential, and then only to the extent therein set forth. A waiver
by Presidential of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which Presidential would otherwise
have had on any future occasion. No failure to exercise nor any delay in
exercising on the part of Presidential, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently and shall be construed as affording Presidential rights additional
to and not exclusive of any rights and remedies conferred under the laws of the
State of New York, any other laws or any Loan Document or Settlement Document.
6.11 Certain Consents. If any Lightstone Party (the "requesting party")
shall seek the approval by or consent of Presidential under this Agreement or
any of the other Settlement Documents, and Presidential shall fail or refuse to
give such consent or approval, then the requesting party shall not be entitled
to any damages for any withholding or delay of such approval or consent by
Presidential, it being intended that the requesting party's sole remedy shall be
an action for injunction or specific performance, which remedy of an injunction
or specific performance shall be available only in those cases in which
Presidential has expressly agreed under the applicable instrument or agreement
not unreasonably to withhold or delay its consent or approval.
6.12 Severability. In the event that any provision of this Agreement or
the application thereof to Presidential or any Lightstone Party, in any
circumstance, shall, to any extent, be invalid or unenforceable under any
applicable statute, regulation or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith, and shall be
deemed modified to conform to such statute, regulation or rule of law, and the
remainder of this Agreement and the application of any such invalid or
unenforceable provision to parties, jurisdictions, or circumstances other than
to whom or which it is held invalid or enforceable, shall not be affected
thereby nor shall same affect the validity or enforceability of any other
provision of this Agreement.
6.13 Consent to Jurisdiction. Any court action brought to interpret or
enforce any provision of this Agreement or any other Settlement Document or to
prosecute any claim arising hereunder or thereunder must be commenced and
maintained in the state or federal courts in the State of New York. Presidential
and the Lightstone Parties hereby irrevocably submit to the exclusive
jurisdiction and venue of the state and federal courts in the State of New York
for such purposes.
6.14 ▇. ▇▇▇▇▇▇▇▇▇▇▇▇. Except as otherwise set forth below, ▇.
▇▇▇▇▇▇▇▇▇▇▇▇ shall not be personally liable with respect to the obligations
evidenced by this Agreement or the Settlement Documents and no attachment, lien,
execution, recourse or other writ or process shall be sought, issued or levied
upon any assets, properties or funds of ▇. ▇▇▇▇▇▇▇▇▇▇▇▇. Notwithstanding the
foregoing, this Section shall not affect Presidential's right to bring an action
to pursue Presidential's rights and remedies against ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ under the
▇▇▇▇▇▇▇▇▇▇▇▇ - FW Manager Pledge and the ▇▇▇▇▇▇▇▇▇▇▇▇ - FW Realty Advisors
Pledge, an action for injunctive relief or specific performance, or other
appropriate action or proceeding for the purpose of enabling Presidential to
realize upon the Collateral (as defined in the ▇▇▇▇▇▇▇▇▇▇▇▇ - FW Manager Pledge
and the ▇▇▇▇▇▇▇▇▇▇▇▇ - FE Realty Advisors Pledge, respectively) and any other
collateral given to Presidential as security for such obligations, as long as no
judgment for money or damages is entered as aforesaid.
6.15 WAIVER OF JURY TRIAL. THE PARTIES HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRESIDENTIAL PARTIES:
--------------------
PRESIDENTIAL REALTY CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
PRESIDENTIAL IATG, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
PRC MEMBER LLC
By: Presidential Realty Corporation,
its managing member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇▇▇▇ PARTIES:
---------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
THE DWL 2003 FAMILY TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Trustee
▇▇▇▇▇▇▇▇▇▇ ▇▇ REALTY PARTNERS, LP
By: FW Realty Advisors, LLC,
its managing general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Manager
BENT CREEK I FW, LLC, BENT
TREE FW, LLC, BROOKSIDE FW,
LLC, BROOKSIDE FW, LLC,
CAMELOT VILLAGE FW, LLC,
CHRISTIANBURG BLUFF FW,
LLC, DEER RUN FW, LLC, KNOB
FW, LLC, RAIN TREE VILLAGE
FW, LLC, RIDGEWOOD VILLAGE
FW, LLC, AUGUSTA FARMS FW,
LLC, BRIDLE CREEK FW, LLC,
CANDLEWOOD FW, LLC, MILL
▇▇▇▇▇ ▇▇, LLC, ▇▇▇▇▇▇▇▇▇▇
TOWNHOMES FW, LLC,
NORTHAMPTON FW, LLC, ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇, LLC, QUADRANGLE
FW, LLC, WASHINGTON SQUARE
FW, LLC By: ▇▇▇▇▇▇▇▇▇▇ ▇▇
Manager, LLC,
its managing member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Manager
JJFW, LLC, FW REALTY
ADVISORS, LLC, ▇▇▇▇▇▇▇▇▇▇
▇▇ MANAGER, LLC, LIGHTSTONE
MEMBER LLC, LIGHTSTONE
MEMBER II LLC, LIGHTSTONE
MEMBER III LLC, WEST
MANCHESTER MALL LLC,
▇▇▇▇▇▇▇ SQUARE MALL LLC,
MOUNT ▇▇▇▇▇ SQUARE MALL
LLC, SHENAGO VALLEY MALL
LLC, MARTINSBURG MALL LLC,
MACON MALL LLC, BURLINGTON
MALL LLC, SHAWNEE MALL LLC,
BRAZOS OUTLETS CENTER LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Manager
MACON BURLINGTON OWNER, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, President
IATG PUERTO RICO, LLC
By: IATG Manager, LLC, its managing
member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Member
IATG MANAGER, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Member
LIST OF EXHIBITS
Exhibit A FWI Fee Owners and FWI Properties
Exhibit B FWII Fee Owners and FWII Properties
Exhibit C Lightstone I Fee Owners and Lightstone I Properties
Exhibit D PRC Fee Owner and PRC Property
Exhibit E Lightstone II Fee Owners and Lightstone II Properties
Exhibit F Lightstone III Fee Owners and Lightstone III Properties
Exhibit G The IATG Property
Exhibit G-1 Pending or Potential Litigation
Exhibit H $750,000 Note
Exhibit I $750,000 Pledge
Exhibit I-1 IATG $750,000 Omnibus Agreement
Exhibit J Assumed Indebtedness Note
Exhibit K Assumption, Consolidation, Modification Agreement
Exhibit L Consolidated Indebtedness Note
Exhibit M ▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ FW Manager Pledge
Exhibit N ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager Omnibus Agreement
Exhibit O ▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ FW Realty Partners Amended
Pledge
Exhibit P ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners Restated Omnibus Agreement
Exhibit Q ▇▇▇▇▇▇▇▇▇▇▇▇ - FW Realty Advisors Pledge
Exhibit R FW Realty Advisors Omnibus Agreement
Exhibit S ▇▇▇▇▇▇▇▇▇▇▇▇/2003 Trust - ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment Pledge
Exhibit T ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment Omnibus Agreement
Exhibit U ▇▇▇▇▇▇▇▇▇▇ ▇▇ Manager Pledge
Exhibit V FW Fee Owners Omnibus Agreement
Exhibit W ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners Pledge
Exhibit X FWI Fee Owner Omnibus Agreement
Exhibit Y FW Realty Advisors Pledge
Exhibit Z ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty Partners Omnibus Agreement
Exhibit AA Consolidated Indebtedness Limited Recourse Guaranty
Exhibit BB FWI Loan Termination Agreement
Exhibit CC Termination of the FWI Guaranties
Exhibit DD Amended and Restated Environmental Indemnity Agreement
Exhibit EE Intentionally Omitted
Exhibit FF IATG Assignment
Exhibit GG Amended and Restated Operating Agreement of IATG
Exhibit HH IATG Environmental Indemnity Agreement
Exhibit II Lightstone II Loan/Operating Agreement Modification
Agreement
Exhibit ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ Restated Guaranty
Exhibit ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ Amended Note
Exhibit LL Lightstone II Amended Pledge Agreement
Exhibit MM Shawnee Reaffirmed Omnibus Agreement
Exhibit NN Brazos Reaffirmed Omnibus Agreement
Exhibit OO Lightstone II Amended Environmental Indemnity
Exhibit PP $500,000 Lightstone II - IATG Pledge (▇▇▇▇▇▇▇▇▇▇▇▇)
Exhibit PP-1 IATG (▇▇▇▇▇▇▇▇▇▇▇▇) $500,000 Omnibus Agreement
Exhibit PP-2 $500,000 Lightstone II - IATG Pledge (IATG Manager)
Exhibit PP-3 IATG (IATG Manager) $500,000 Omnibus Agreement
Exhibit QQ Lightstone II Partial Release of Guaranty
Exhibit ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ Release From ▇▇▇▇▇▇▇▇▇▇▇▇
Exhibit ▇▇ ▇▇▇▇▇▇▇▇▇▇ I Partial Release from Presidential
Exhibit SS-1 West Manchester Pledge Partial Release from Presidential
Exhibit SS-2 West Manchester UCC Amendment from Presidential
Exhibit SS-3 Lightstone I Assignment
Exhibit SS-4 Lightstone I Consent to Resolution of Senior Loan From
Presidential
Exhibit TT Lightstone I Release from ▇▇▇▇▇▇▇▇▇▇▇▇
Exhibit UU Lightstone I Guaranty Release and Termination
Exhibit VV Presidential Release from ▇▇▇▇▇▇▇▇▇▇▇▇ and PRC
Exhibit WW PRC Release from Presidential
Exhibit XX Intentionally Omitted
Exhibit XX-1 PRC Assignment
Exhibit YY Lightstone III Partial Release from Presidential
Exhibit ZZ Lightstone III Release from ▇▇▇▇▇▇▇▇▇▇▇▇
Exhibit ZZ-1 Lightstone III Consent to Resolution of Senior Loans From
Presidential
Exhibit AAA Lightstone III Guaranty Termination
Exhibit AAA-1 Lightstone III Assignment
Exhibit BBB Other Matters Release From Presidential
Exhibit CCC Others Matters Release From ▇▇▇▇▇▇▇▇▇▇▇▇
Exhibit CCC-1 Assignment of Loans Made to ▇▇▇▇▇▇▇▇▇▇ ▇▇ Investment
Exhibit DDD FW Property Manager Letter of Direction